Dometic market benchmarks the Sensex and the Nifty extended their losing streak into the sixth consecutive session on September 28 as concerns over aggressive rate hikes and inflation continue to weigh on sentiment.
Global markets remained under pressure while dollar and bond yields rose as concerns over the macroeconomy refuse to fade away.
As per a Reuters report, “World shares sank to two-year lows on Wednesday, hammered by spiralling borrowing costs that intensified fears of a global recession and sent investors into the arms of the safe-haven dollar. Yields on US 10-year Treasuries topped 4% for the first time since 2010 as markets wagered the Federal Reserve might have to take rates past 4.5% in its crusade against inflation.”
Sensex opened 397 points lower at 56,710.13 and fell 622 points to touch the intraday low of 56,485.67. The index closed 509 points, or 0.89%, lower at 56,598.28. The Nifty50 ended at 16,858.60, down 149 points, or 0.87%.
Mid and smallcaps outperformed as the BSE Midcap index ended 0.47% lower while the Smallcap index closed with a loss of 0.43%.
The overall market capitalisation of BSE-listed firms dropped to nearly ₹268 lakh crore on September 28 from about ₹270 lakh crore on September 27, making investors poorer by ₹2 lakh crore in a day.
In the six sessions of losses, Sensex has fallen 5.2% while the Nifty has come down 5.4%; the cumulative m-cap of BSE-listed firms has dropped by about ₹15 lakh crore from ₹283 lakh crore on September 20.
"Investors continue to be sceptical of the domestic market's higher premium amid the ongoing global deceleration while foreign investors are fleeing emerging economies in search of safer havens. Although the domestic economy is buoyed by solid fundamentals, the stock market's appetite for risk has been hindered by the rising worries of a worldwide recession," said Vinod Nair, Head of Research at Geojit Financial Services.
Shares of Asian Paints, Sun Pharma and Dr Reddy's Labs ended as the top gainers in the Sensex index. On the flip side, shares of ITC, Axis Bank and Reliance Industries ended as the top laggards.
Among the sectoral indices, BSE Metal fell 2.32%, ending as the top laggard. Banking, financial services, energy, commodities, utilities and power indices fell more than a percent each.
"Domestic investors are turning to IT and pharma companies, which have been in a consolidation phase for the past year and are now gaining from the rupee depreciation. The RBI policy meeting is currently underway, and the central bank is likely to raise repo rates by 35-50 basis points, however, the inflation outlook may soften in reaction to declining commodity prices," said Nair.
Crude oil prices saw an uptick. Brent Crude traded above the $85 a barrel mark. The rupee fell 36 paise to close at 81.94 per dollar.
Palak Kothari, Senior Technical Analyst of Choice Broking pointed out that the Nifty took support at 89-EMA (exponential moving average) and faced resistance at 200 DMA (daily moving average) which is the border range for the upcoming sessions.
"The Nifty formed a Doji candle on a daily chart which points out indecision between buyer and seller. On the open interest (OI) data, the highest Call OI was witnessed at 17,000, followed by 17,100 while the highest Put OI was witnessed at 16,500, followed by 16,700. The daily momentum indicator RSI & MACD are trading at the oversold zone while in the hourly chart, the bullish divergence has been seen which suggests some pullback in the near term," said Kothari.
"The support for Nifty has shifted around 16,700 and on the upside, 17,100-17,200 levels may act as immediate hurdles, said Kothari.
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